Chief executive officer of Advanced Micro Devices again implied in an interview that the company was on track to sell off its manufacturing facilities and switch to a fables model of operation. No details were given, but a claim itself means that the decision has already been made.
“We’re going to go away from a captive fab model to more of a fables model for the CPU part of the business. Longer-term, it relieves us of the burden of having to shell out cash for these gigantic factories. So it will be more of a pay-as-you-go model like a traditional fables semiconductor company,” said Dirk Meyer, chief executive officer and president of Advanced Micro Devices, in an interview with Fortune.
Last week an analyst said that AMD would announce plans to transfer its manufacturing fabs to a third party already in September, hence, a comment like the one made by Mr. Ruiz further makes investors and observers believe that AMD had decided to outsource production and is executing its so-called asset smart strategy now.
Mr. Meyer is vague on the exact timing of the expected deal, but he claims that this is probably the best thing the company can do rapidly to recover its financial position, and its reputation with investors. A successful transaction would fill AMD’s pockets with cash, while handing manufacturing to a company that can better keep pace with Intel’s operations, reports Fortune.
According to Mr. Meyer, the source of the problems of AMD is acquisition of ATI Technologies back in 2006 in the light of incoming product delays and issues with the chipmaker’s quad-core processor and other products.
“Unfortunately we bought a company some of whose businesses went downhill at the same time ours did. We’re in the midst of really lousy financial performance, and it’s that piece that we’ve really got to turn around,” said Mr. Meyer.